Amazon 

Case 

“Amazon dot com”, is an American e-commerce company that is located in Seattle, Washington. The
“Amazon.com” is considered one of the first big companies that offer to sell goods over the Internet
and where it is faced strong doubts on the possibility of continuity, but they approved the opposite
and announced their first annual profit in 2003. Amazon’s sales rank is 294, profits rank is 437
where the net income for year 2010 was 1.152 billion and finally the market value is 101(Forbes,
2011). The company was founded in 1994 by Jeff Bisoz to start the first activity in 1995 by working
as a store to sell books online. The company started under the name “Cadabra .com”, and then Bezos
decided to change the name to “Amazon” referring to the largest river in the world. After a period of
time, it extended its line of activity to include, in addition to books, tapes and DVDs and music CDs,
computer software, video games and hardware, clothing, furniture and materials, toys and other
items. The company was founded special separate sites that operate in Canada and the United
Kingdom, Germany, Austria, France, China and Japan.. The Amazon logo itself is strength; it has an
arrow in the shape of a smile. The arrow starts from the A in Amazon and ends under Z, reflecting
the widest variety of products possible. In the same time, the smile represents the importance of
customer satisfaction, and it reflects the friendliness of Amazon.
What are the benefits and limitations of Amazon’s online retail model?
Amazon has a specific retail model in pricing, promotion, product and people. First pricing which is
considered a very powerful point for customers and sellers. Amazon provides the customer with
specific prices so that he/she can compare prices between products so that he/she can choose the
best they prefer. Second is the promotion, as Amazon provides its customers with new promotions
available in the site from different sellers. In addition, they send e-mails to their customers to inform
them of the new products, offers and promotions available. Third is the product itself, products at
Amazon are perfectly categorized into many categories where a customer can easily search of what
he/she needs without a need for a long search. Finally are the people, Amazon mostly care about
their customers’ satisfaction as they deliver the products to their customers on time without any
delays. In addition, they usually track their customers to see what they usually buy, like or search for
so that they can send them e-mails if they have anything new that would get their attention.
Limitations:
Shipping time: Delivering a product usually takes more than 5 days so if a customer needs a product
immediately he/she can’t get it at the time needed because of that.
Shipping Cost: the delivery cost depends on the country of the customer and the seller. In this case if
they were both far from each other this might cost the customer a lot to get the product.
Communication: the communication between the buyer and the seller might be very difficult as the
website doesn’t provide the buyer with an easy way of communicating with the seller while buying.
Product: the product delivered to the buyer might not be in good quality or exactly as described in
the website so this might cause mistrust between the buyer and the website itself.
Physical product: the buyer can’t touch the product while buying it so this might cause mistrust from
the buyer as he/she won’t trust the features of the product without making sure of them.
Benefits:
Easy Access: Amazon provides the customers with easy access and search anytime they need a
product without having to search so many websites to find the product they need. Variety of
Goods: Amazon provides its customers with huge variety of goods that can satisfy their customers
easily. Privacy: Dealers won’t be able to communicate with each other unless they have a
deal. Security:Payment on the website is very secure as your password and card number won’t be
shown to anyone and your product will be delivered within the time specified after the payment is
done.
How does Amazon.com change the market for books?
Amazon has changed a lot in the book market lately. In the beginning Amazon used to sell new
books, old books and online books to customers before having the product available but they
changed that and started selling the products only when they are available.  Moreover, Amazon’s
founder and CEO Jeff Bezos created an online device called the Kindle which “is a portable e-book
reader. More precisely, it is a software, hardware and network platform developed by
Amazon.com that uses wireless connectivity to enable users to shop for, download, browse, and read
e-books, newspapers, magazines, blogs, and other digital media in some countries.The Kindle
hardware devices use an e-ink electronic paper display that, in addition to displaying up to 16
shades of gray, minimizes power consumption and simulates reading on paper. This is a great
replacement for digital books being sold online as Jeff said that they have been selling e-books for
long time and no one buys e-books. The point of view that the CEO has is that customers read books
as they prefer touching the book and sensing the meaning through reading page by page but no one
is going to buy an e-book in order to read it on his/her laptop or pc. This was the reason behind this
device that is definitely going to change the market of books.
How does the design of Amazon help the user to locate a product?
The design of Amazon is very flexible for customers to search in and find the product that they are
looking for. First there is a search icon with all the departments available on Amazon so that the
customer can easily choose the department he/she is looking for such as Baby, Beauty, Jewelry, etc…
and then write what specifically he/she needs in this category. In addition to that, each customer can
have his/her own cart in order to select the item that the customer prefers to buy all together.
Moreover, available on the left of the website all the department with the sub departments to make it
easier for the customer to find the product they need. Furthermore, the middle part of the website
contains the most sold products on Amazon which gives the customer an idea of what other
customers buy and prefer and this might drive him/her to try the product. Finally, Amazon provides
the customer with the prices of the product which is more preferable to customers as they like to
know the prices and compare them with other sellers’ prices before buying.
What is collaborative filtering? How does Amazon use this technique?
Collaborative Filtering is the patterns of filtering information which involve the collaboration of
several data sources to analyze the profiles and buying/selling patterns. In which this filtering
process offers the services and the merchandise being sold within the site to various customers.  It
works well for books, music, videos, etc. However, it does not work well for a number of categories
such as clothing, jewelry, cosmetics and so on. Currently this service is available only to those who
have registered in a website and logged on to their accounts. E-commerce websites adapted this
technology in order to recommend products to shoppers based on their pervious purchases. Also,
when adopting this method, it provides contents to users depending on what other users chosen and
has share common interests. Amazon deploys the latest technologies to collect data on customer
behaviors. This enables them to offer more personalized items, based upon preferences
demonstrated through purchases or items visited. For example, when you decided to buy a book
from Amazon, the site use input about a customer’s interests to generate a list of recommended
items. And in this way, they will increase the impulse buying and increase sales.
Is it a reasonable business practice to sell used books on Amazon or not
EBay and Amazon are well known e-commerce companies that are competing each other. Therefore,
eBay has started to sell used books in order to be differentiated from Amazon. Similarly, Amazon has
also offered this service to be included in its offering mix. Bezos believes that selling used books
doesn’t hurt the new books’ industry. In the following, he responded to the Author Guild, after he
attacked the Amazon’s site of selling used books. He said, “Offering used books are simply good for
customers. It makes out-of-print books available and other books more affordable. Making books
affordable is a fundamental good”. (Rielly,2002). I believe, selling used books over the internet is
actually didn’t have any unethical act that hurts either the new books industry or the authors. While,
the opposite is true, offering low priced products caused customer to visit Amazon’s website more.
Also, when customers sell their old books, they can use the sell’s budget to buy new books. Another
important issue is that Amazon shouldn’t have to compensate the publisher. Because, the publisher
has produced a product, and the product is sold to a consumer. What the consumer does with the
product after consuming it is the consumer’s business, not the publisher’s. I believe that offering
used books are good for customer. It helps in growing their knowledge and be more open to the
world by reading. Many customers, who can’t afford to buy new versions of  books, prefer to buy old
version or we can call it “used books”. Let’s take students’ situations as an example. Students are not
willing to buy new books every semester for all the courses, as a result they are always looking for
used books. Institutions may consider that as unethical act, where every semester they make sure to
provide the required books in time. However, most of the students (customers) are aware that the
price of this book is too expensive in the university’s bookstore, so they prefer to buy used books
instead. Furthermore, I don’t think it will affect the demand of the new books, since many customers
still prefer to buy new books and keep them in their own library.
References:
Dudley, Brier (19 November 2007). “Kindle hacking, iPod parallels and a chat with the Kindle
director”. Seattle
Times.http://blog.seattletimes.nwsource.com/brierdudley/2007/11/chatting_with_amazons_kindle_
d.html. Retrieved 28 December 2010.
“Amazon Kindle: License Agreement and Terms of Use”. Amazon.com, Inc. 2009-02-
09.http://www.amazon.com/gp/help/customer/display.html?ie=UTF8&nodeId=200144530.
Retrieved 2010-12-02.
A conversation with Jeff Bezos, chairman and CEO of Amazon.com about The Kindle, a wireless,
portable reading device.http://www.charlierose.com/view/interview/8784
http://www.amazon.com/
http://www.businessdictionary.com/definition/collaborative-filtering.html
http://en.wikipedia.org/wiki/Collaborative_filtering
http://en.wikipedia.org/wiki/Amazon.com
http://www.oreillynet.com/pub/wlg/1291
http://finapps.forbes.com/finapps/jsp/finance/compinfo/CIAtAGlance.jsp?tkr=AMZN